Today’s Top News & Analysis
Contraction in Egyptian non-oil private sector activity for the 27th consecutive month
Another slight improvement in Egypt's Net Foreign Reserves in February 2023
DOMT 2022 results: Extraordinary performance
ETEL 2022 results: Strong net profits on higher revenues
Madinet Nasr for Housing securitized EGP806mn of bonds
EGAL’s BoD ratifies FY2023/24’s budget
MCRO 2022 results: Strong earnings on higher revenues
MFPC 2022 standalone: Strong earnings growth yet no proposed dividends
QIA is reportedly interested in Sinai Manganese
Macro
Contraction in Egyptian non-oil private sector activity for the 27th consecutive month
Although with a marginal improvement, Egypt's Purchasing Managers’ Index (PMI) for the non-oil private sector still shrank for the 27th consecutive month. The index strengthened to 46.9 in February 2023 from 45.5 in January 2023, yet still below the 50.0 threshold that marks growth in activity. This comes as the surging inflation and importing obstacles still weigh on business. (Reuters)
Another slight improvement in Egypt's Net Foreign Reserves in February 2023
For the 6th month in a row, Egypt's Net Foreign Reserves (NIR) increased slightly in February 2023 to USD34.35bn by USD128mn from USD34.22bn in January 2023. (CBE)
corporate
DOMT 2022 results: Extraordinary performance
Arabian Food Industries [DOMT] posted 2022 consolidated net profits of EGP266mn vs. EGP72mn a year before, due to:
1) Higher revenues of EGP5.2bn (+55% y/y).
2) Gross profit margin coming in at 24.4% (+2.0pp y/y).
3) SG&A-to-revenues ratio improving to 16.1% (-2.5pp y/y).
4) 2021 being a low base year.
Regarding Q4 2022, DOMT reported its highest quarterly net profits and revenues ever:
1) Net profits grew by 96% y/y to EGP103mn (+c.100% q/q).
2) Revenues grew by 49% y/y to EGP1.6bn (+23% q/q).
3) Gross profit margin grew to 26% (+2.0pp y/y), (+3.0pp y/y).
4) SG&A-to-revenues ratio improved to 15.0% (-2.0pp y/y), (-1.7pp q/q).
On a separate note, DOMT's BoD proposed distributing cash dividends of EGP0.50/share, implying a yield of 8%.
DOMT is currently trading at a TTM P/E of 6.7x. Our 12MPT for DOMT is EGP8.7/share.(Company disclosures: 1, 2)
ETEL 2022 results: Strong net profits on higher revenues
Telecom Egypt [ETEL] posted 2022 net profits of EGP9.2bn (+9% y/y), on higher revenues of EGP44.3bn (+19% y/y). The revenue growth was driven by a double-digit growth of 21% and 17% in both retail and wholesale revenues, respectively. Meanwhile, gross profit margin came in flat at 22.6% (-0.7pp y/y).
For Q4 2022, net profits grew by 30% y/y to EGP3.0bn (+26% q/q), on higher revenues of EGP12.0bn (+12% y/y), (+1% q/q).
In addition, ETEL's BoD proposed distributing cash dividends of EGP0.75/share, implying a yield of 2.7%. (Company disclosure)
Madinet Nasr for Housing securitized EGP806mn of bonds
Madinet Nasr for Housing & Development [MNHD] in cooperation with EFG Hermes Holding [HRHO] finished its second phase of bond securization worth EGP805.5mn, in a three phase securization program worth EGP3bn. (Al-Mal)
EGAL’s BoD ratifies FY2023/24’s budget
Egypt Aluminum’s [EGAL] BoD held on 2 March 2023 has ratified the budget for FY2023/24. The company expects net income to reach EGP3.5bn on the back of a topline of EGP26.6bn, where exports represent 62% of total sales. (Company disclosure)
MCRO 2022 results: Strong earnings on higher revenues
Macro Pharmaceutical Group [MCRO] posted 2022 net profits of EGP174mn (+18% y/y) on higher revenues of EGP730mn (+23% y/y). The revenues showed this strong growth despite the sales volumes decreasing to 18mn units (-3% y/y). Meanwhile, gross profit margin and EBITDA margin declined to 77.0% (-2.7 pp y/y) and 38.4% (-4.5 pp y/y), respectively. (Company disclosure)
MFPC 2022 standalone: Strong earnings growth yet no proposed dividends
Misr Fertilizers Production [MFPC] announced its standalone results for 2022.
MFPC’s net profits surged by 148% y/y to EGP3.8bn, partially on the back of a 106% y/y increase in top line to EGP6.9bn. However, GPM increase came at only +2 pp y/y to 61%.
· Another contributor to the leap in net profits would be the 39x higher dividends income from MFPC’s subsidiary to EGP629mn.
· Despite the 47% increase in SG&A to EGP143mn and the 97% y/y increase in other operating expenses to EGP61mn, However the 32% y/y increase in financing income to EGP292mn and other income of 53% y/y to EGP9mn offset the increase in expenses.
· FX gains also reached EGP24.6mn against losses of EGP9.7mn last year.
· We note that MFPC's BoD decided not to suggest dividends distribution, leaving the decision of payout to the OGM without a proposal from the BoD. (Company disclosures: 1, 2)
ADQ is reportedly interested in Sinai Manganese
Sources allege that Abu Dhabi Developmental Holding Company (ADQ) is negotiating acquiring a stake in Sinai Manganese company during H2 2023. The company is a subsidiary of National Investment Bank (NIB) and Holding Company for Chemical Industries (CIHC). (Economy plus)
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